Accuride (ACW)

Our operations, facilities, and properties
are subject to extensive and evolving laws and regulations pertaining to air
emissions, wastewater discharges, the handling and disposal of solid and
hazardous materials and wastes, the investigation and remediation of
contamination, and otherwise relating to health, safety and the protection of
the environment and natural resources. As a result, we are involved from time
to time in administrative or legal proceedings relating to environmental, health
and safety matters, and have in the past and will continue to incur capital
costs and other expenditures relating to such matters. In addition to
environmental laws that regulate our subsidiaries ongoing operations, our
subsidiaries are also subject to environmental remediation liability. Under the
federal Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA),
and analogous state laws, our subsidiaries may be liable as a result of the
release or threatened release of hazardous materials into the environment. Our
subsidiaries are currently involved in several matters relating to the
investigation and/or remediation of locations where they have arranged for the
disposal of foundry and other wastes. Such matters include situations in which
we have been named or are believed to be Potentially Responsible Parties as
defined under CERCLA or state and local laws in connection with the
contamination of these sites. Additionally, environmental remediation may be
required to address soil and groundwater contamination identified at certain
facilities.

As of December 31, 2008, we had an
environmental reserve of approximately $1.5 million, related primarily to
our foundry operations. This reserve is based on current cost estimates and
does not reduce estimated expenditures to net present value, but does take into
account the benefit of a contractual indemnity given to us by a prior owner of
our wheel-end subsidiary. The failure of the indemnitor to fulfill its
obligations could result in future costs that may be material. Any cash
expenditures required by us or our subsidiaries to comply with applicable
environmental laws and/or to pay for any remediation efforts will not be
reduced or otherwise affected by the existence of the environmental reserve. We
currently anticipate spending approximately $0.2 million per year in 2009
through 2012 for monitoring the various environmental sites associated with the
environmental reserve, including attorney and consultant costs for strategic
planning and negotiations with regulators and other potentially responsible
parties, and payment of remedial investigation costs. Based on all of the
information presently available to us, we believe that our environmental
reserves will be adequate to cover the future costs related to the sites
associated with the environmental reserves and that any additional costs will
not have a material adverse effect on our financial condition, results of
operations or cash flows. However, the discovery of additional sites, the modification
of existing or the promulgation of new laws or regulations, more vigorous
enforcement by regulators, the imposition of joint and several liability under
CERCLA or analogous state laws or other unanticipated events could result in a
material adverse effect.

The final Iron and Steel Foundry National
Emission Standard for Hazardous Air Pollutants, or NESHAP, was developed
pursuant to Section 112(d) of the Clean Air Act and requires all
major sources of hazardous air pollutants to install controls representative of
maximum achievable control technology. We believe that our foundry operations
are in compliance with the applicable requirements of the Iron and Steel
Foundry NESHAP.

Environmental Matters

Our operations, facilities, and propertiesare subject to extensive and evolving laws and regulations pertaining to airemissions, wastewater discharges, the handling and disposal of solid andhazardous materials and wastes, the investigation and remediation ofcontamination, and otherwise relating to health, safety and the protection ofthe environment and natural resources. As a result, we are involved from timeto time in administrative or legal proceedings relating to environmental, healthand safety matters, and have in the past and will continue to incur capitalcosts and other expenditures relating to such matters. In addition toenvironmental laws that regulate our subsidiaries ongoing operations, oursubsidiaries are also subject to environmental remediation liability. Under thefederal Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA),and analogous state laws, our subsidiaries may be liable as a result of therelease or threatened release of hazardous materials into the environment. Oursubsidiaries are currently involved in several matters relating to theinvestigation and/or remediation of locations where they have arranged for thedisposal of foundry and other wastes. Such matters include situations in whichwe have been named or are believed to be Potentially Responsible Parties asdefined under CERCLA or state and local laws in connection with thecontamination of these sites. Additionally, environmental remediation may berequired to address soil and groundwater contamination identified at certainfacilities.

As of December 31, 2008, we had anenvironmental reserve of approximately $1.5 million, related primarily toour foundry operations. This reserve is based on current cost estimates anddoes not reduce estimated expenditures to net present value, but does take intoaccount the benefit of a contractual indemnity given to us by a prior owner ofour wheel-end subsidiary. The failure of the indemnitor to fulfill itsobligations could result in future costs that may be material. Any cashexpenditures required by us or our subsidiaries to comply with applicableenvironmental laws and/or to pay for any remediation efforts will not bereduced or otherwise affected by the existence of the environmental reserve. Wecurrently anticipate spending approximately $0.2 million per year in 2009through 2012 for monitoring the various environmental sites associated with theenvironmental reserve, including attorney and consultant costs for strategicplanning and negotiations with regulators and other potentially responsibleparties, and payment of remedial investigation costs. Based on all of theinformation presently available to us, we believe that our environmentalreserves will be adequate to cover the future costs related to the sitesassociated with the environmental reserves and that any additional costs willnot have a material adverse effect on our financial condition, results ofoperations or cash flows. However, the discovery of additional sites, the modificationof existing or the promulgation of new laws or regulations, more vigorousenforcement by regulators, the imposition of joint and several liability underCERCLA or analogous state laws or other unanticipated events could result in amaterial adverse effect.

The final Iron and Steel Foundry NationalEmission Standard for Hazardous Air Pollutants, or NESHAP, was developedpursuant to Section 112(d) of the Clean Air Act and requires allmajor sources of hazardous air pollutants to install controls representative ofmaximum achievable control technology. We believe that our foundry operationsare in compliance with the applicable requirements of the Iron and SteelFoundry NESHAP.

ENVIRONMENTAL MATTERS: Lessee covenants and agrees
that at all times following the commencement of the Term hereof Lessee and all
other persons who manage, use, operate or occupy the Premises shall comply with
all federal, state and local laws, regulations and orders regulating health,
safety and environmental matters, including, without limitation, air pollution,
soil and water pollution and the use, generation, storage, handling or disposal
of Hazardous Materials (defined below in this Paragraph).

Lessee
shall not generate, handle, use, store, treat, discharge, release or dispose of
any Hazardous Materials at the Premises unless Lessee shall be in full
compliance with all environmental laws relating to Hazardous Materials.
Further Lessee agrees to hold Lessor
harmless for any hazardous, toxic or dangerous waste, substance or material
spilled or released on the Premises in the future (during the Term of the
Lease) by Lessee, its agents, contractors, guests, tenants, employees or
invitees.

For purposes of this Paragraph, the term Hazardous Materials shall
mean any hazardous, toxic or dangerous waste, substance or material defined as
such in (or for purposes of) the Comprehensive Environmental Response,
Compensation and Liability Act of the United

14

States Congress, or in any other law, regulation or order, now or
hereafter in effect, of any governmental authority regulating, or imposing
liability or standards of conduct relating to, any hazardous, toxic or
dangerous waste, substance or material.

Our operations, facilities, and properties
are subject to extensive and evolving laws and regulations pertaining to air
emissions, wastewater discharges, the handling and disposal of solid and
hazardous materials and wastes, the investigation and remediation of
contamination, and otherwise relating to health, safety and the protection of
the environment and natural resources. As a result, we are involved from time
to time in administrative or legal proceedings relating to environmental,
health and safety matters, and have in the past and will continue to incur
capital costs and other expenditures relating to such matters. In addition to
environmental laws that regulate our subsidiaries ongoing operations, our
subsidiaries are also subject to environmental remediation liability. Under the
federal Comprehensive Environmental Response, Compensation, and Liability Act,
or CERCLA, and analogous state laws, our subsidiaries may be liable as a result
of the release or threatened release of hazardous materials into the
environment. Our subsidiaries are currently involved in several matters
relating to the investigation and/or remediation of locations where they have
arranged for the disposal of foundry and other wastes. Such matters include
situations in which we have been named or are believed to be Potentially
Responsible Parties under CERCLA or state and local laws in connection with the
contamination of these sites. Additionally, environmental remediation may be
required to address soil and groundwater contamination identified at certain
facilities.

As of December 31, 2007, we had an
environmental reserve of approximately $2.6 million, related primarily to
TTIs foundry operations. This reserve is based on current cost estimates and
does not reduce estimated expenditures to net present value, but does take into
account the benefit of a contractual indemnity given to us by a prior owner of
our wheel-end subsidiary. The failure of the indemnitor to fulfill its
obligations could result in future costs that may be material. Any cash
expenditures required by us or our subsidiaries to comply with applicable
environmental laws and/or to pay for any remediation efforts will not be
reduced or otherwise affected by the existence of the environmental reserve. We
currently anticipate spending approximately $0.2 million per year in 2008
through 2011 for monitoring the various environmental sites associated with the
environmental reserve, including attorney and consultant costs for strategic
planning and negotiations with regulators and other potentially responsible
parties, and payment of remedial investigation costs. Based on all of the
information presently available to us, we believe that our environmental
reserves will be adequate to cover the future costs related to the sites
associated with the environmental reserves, and that any additional costs will
not have a material adverse effect on our financial condition, results of
operations or cash flows. However, the discovery of additional sites, the
modification of existing or the promulgation of new laws or regulations, more
vigorous enforcement by regulators, the imposition of joint and several
liability under CERCLA or analogous state laws, or other unanticipated events
could also result in such a material adverse effect.

The final Iron and Steel Foundry National
Emission Standard for Hazardous Air Pollutants, or NESHAP, was developed
pursuant to Section 112(d) of the Clean Air Act and requires all
major sources of hazardous air pollutants to install controls representative of
maximum achievable control technology. We are evaluating the applicability of
the Iron and Steel Foundry NESHAP to our foundry operations. If applicable,
compliance with the Iron and Steel Foundry NESHAP may result in future
significant capital costs, which we currently expect to be approximately
$6 million in total during the period 2008 through 2009.

Environmental Matters

Our operations, facilities, and propertiesare subject to extensive and evolving laws and regulations pertaining to airemissions, wastewater discharges, the handling and disposal of solid andhazardous materials and wastes, the investigation and remediation ofcontamination, and otherwise relating to health, safety and the protection ofthe environment and natural resources. As a result, we are involved from timeto time in administrative or legal proceedings relating to environmental,health and safety matters, and have in the past and will continue to incurcapital costs and other expenditures relating to such matters. In addition toenvironmental laws that regulate our subsidiaries ongoing operations, oursubsidiaries are also subject to environmental remediation liability. Under thefederal Comprehensive Environmental Response, Compensation, and Liability Act,or CERCLA, and analogous state laws, our subsidiaries may be liable as a resultof the release or threatened release of hazardous materials into theenvironment. Our subsidiaries are currently involved in several mattersrelating to the investigation and/or remediation of locations where they havearranged for the disposal of foundry and other wastes. Such matters includesituations in which we have been named or are believed to be PotentiallyResponsible Parties under CERCLA or state and local laws in connection with thecontamination of these sites. Additionally, environmental remediation may berequired to address soil and groundwater contamination identified at certainfacilities.

As of December 31, 2007, we had anenvironmental reserve of approximately $2.6 million, related primarily toTTIs foundry operations. This reserve is based on current cost estimates anddoes not reduce estimated expenditures to net present value, but does take intoaccount the benefit of a contractual indemnity given to us by a prior owner ofour wheel-end subsidiary. The failure of the indemnitor to fulfill itsobligations could result in future costs that may be material. Any cashexpenditures required by us or our subsidiaries to comply with applicableenvironmental laws and/or to pay for any remediation efforts will not bereduced or otherwise affected by the existence of the environmental reserve. Wecurrently anticipate spending approximately $0.2 million per year in 2008through 2011 for monitoring the various environmental sites associated with theenvironmental reserve, including attorney and consultant costs for strategicplanning and negotiations with regulators and other potentially responsibleparties, and payment of remedial investigation costs. Based on all of theinformation presently available to us, we believe that our environmentalreserves will be adequate to cover the future costs related to the sitesassociated with the environmental reserves, and that any additional costs willnot have a material adverse effect on our financial condition, results ofoperations or cash flows. However, the discovery of additional sites, themodification of existing or the promulgation of new laws or regulations, morevigorous enforcement by regulators, the imposition of joint and severalliability under CERCLA or analogous state laws, or other unanticipated eventscould also result in such a material adverse effect.

The final Iron and Steel Foundry NationalEmission Standard for Hazardous Air Pollutants, or NESHAP, was developedpursuant to Section 112(d) of the Clean Air Act and requires allmajor sources of hazardous air pollutants to install controls representative ofmaximum achievable control technology. We are evaluating the applicability ofthe Iron and Steel Foundry NESHAP to our foundry operations. If applicable,compliance with the Iron and Steel Foundry NESHAP may result in futuresignificant capital costs, which we currently expect to be approximately$6 million in total during the period 2008 through 2009.

Our operations, facilities, and properties are subject
to extensive and evolving laws and regulations pertaining to air emissions,
wastewater discharges, the handling and disposal of solid and hazardous
materials and wastes, the investigation and remediation of contamination, and
otherwise relating to health, safety and the protection of the environment and
natural resources. As a result, we are involved from time to time in
administrative or legal proceedings relating to environmental, health and
safety matters, and have in the past and will continue to incur capital costs
and other expenditures relating to such matters. In addition to environmental
laws that regulate our subsidiaries ongoing operations, our subsidiaries are
also subject to environmental remediation liability. Under the federal
Comprehensive Environmental Response, Compensation, and Liability Act, or
CERCLA, and analogous state laws, our subsidiaries may be liable as a result of
the release or threatened release of hazardous materials into the environment.
Our subsidiaries are currently involved in several matters relating to the
investigation and/or remediation of locations where they have arranged for the
disposal of foundry and other wastes. Such matters include situations in which
we have been named or are believed to be Potentially Responsible Parties under
CERCLA or state and local laws in connection with the contamination of these
sites. Additionally, environmental remediation may be required to address soil
and groundwater contamination identified at certain facilities.

As of December 31, 2006, we had an environmental
reserve of approximately $2.6 million, related primarily to TTIs foundry
operations. This reserve is based on current cost estimates and does not reduce
estimated expenditures to net present value, but does take into account the
benefit of a contractual indemnity given to us by a prior owner of our
wheel-end subsidiary. The failure of the indemnitor to fulfill its obligations
could result in future costs that may be material. Any cash expenditures
required by us or our subsidiaries to comply with applicable environmental laws
and/or to pay for any remediation efforts will not be reduced or otherwise
affected by the existence of the environmental reserve. We currently anticipate
spending approximately $0.2 million per year in 2007 through 2010 for
monitoring the various environmental sites associated with the environmental
reserve, including attorney and consultant costs for strategic planning and
negotiations with regulators and other potentially responsible parties, and
payment of remedial investigation costs. Based on all of the information
presently available to us, we believe that our environmental reserves will be
adequate to cover the future costs related to the sites associated with the
environmental reserves, and that any additional costs will not have a material
adverse effect on our financial condition, results of operations or cash flows.
However, the discovery of additional sites, the modification of existing or the
promulgation of new laws or regulations, more vigorous enforcement by
regulators, the imposition of joint and several liability under CERCLA or
analogous state laws, or other unanticipated events could also result in such a
material adverse effect.

The final Iron and Steel Foundry National Emission
Standard for Hazardous Air Pollutants, or NESHAP, was developed pursuant to
Section 112(d) of the Clean Air Act and requires all major sources of
hazardous air pollutants to install controls representative of maximum
achievable control technology. We are evaluating the applicability of the Iron
and Steel Foundry NESHAP to our foundry operations. If applicable, compliance
with the Iron and Steel Foundry NESHAP may result in future significant capital
costs, which we currently expect to be approximately $6 million in total
during the period 2007 through 2008.

Our operations, facilities and properties are
subject to extensive and evolving laws and regulations pertaining to air
emissions, wastewater discharges, the handling and disposal of solid and
hazardous materials and wastes, the investigation and remediation of
contamination, and otherwise relating to health, safety and the protection of
the environment and natural resources. As a result, we are involved from time
to time in administrative or legal proceedings relating to environmental,
health and safety matters, and have in the past and will continue to incur
capital costs and other expenditures relating to such matters. In addition to
environmental laws that regulate our subsidiaries ongoing operations, our
subsidiaries are also subject to environmental remediation liability. Under the
federal Comprehensive Environmental Response, Compensation, and Liability Act,
or CERCLA, and analogous state laws, our subsidiaries may be liable as a result
of the release or threatened release of hazardous materials into the
environment. Our subsidiaries are currently involved in several matters
relating to the investigation and/or remediation of locations where they have
arranged for the disposal of foundry and other wastes. Such matters include
situations in which we have been named or are believed to be Potentially
Responsible Parties under CERCLA or state laws in connection with the
contamination of these sites. Additionally, environmental remediation may be
required to address soil and groundwater contamination identified at certain
facilities.

As of December 31, 2005, we had an
environmental reserve of approximately $2.7 million, related primarily to
TTIs foundry operations. This reserve is based on current cost estimates and
does not reduce estimated expenditures to net present value, but does take into
account the benefit of a contractual indemnity given to us by a prior owner of
our wheel-end subsidiary. We cannot assure you, however, that the indemnitor
will fulfill its obligations, and the failure to do so could result in future
costs that may be material. Any cash expenditures required by us or our subsidiaries
to comply with applicable environmental laws and/or to pay for any remediation
efforts will not be reduced or otherwise affected by the existence of the
environmental reserve. We currently anticipate spending approximately
$0.2 million per year in 2006 through 2010 for monitoring the various
environmental sites associated with the environmental reserve, including
attorney and consultant costs for strategic planning and negotiations with
regulators and other potentially responsible parties, and payment of remedial
investigation costs. Based on all of the information presently available to us,
we believe that our environmental reserves will be adequate to cover the future
costs related to the sites associated with the environmental reserves, and that
any additional costs will not have a material adverse effect on our financial
condition, results of operations or cash flows. However, the discovery of
additional sites, the modification of existing or the promulgation of new laws
or regulations, more vigorous enforcement by regulators, the imposition of
joint and several liability under CERCLA or analogous state laws, or other
unanticipated events could also result in such a material adverse effect.

The final Iron and Steel Foundry National
Emission Standard for Hazardous Air Pollutants, or NESHAP, was developed
pursuant to Section 112(d) of the Clean Air Act and requires all
major sources of hazardous air pollutants to install controls representative of
maximum achievable control technology. We are evaluating the applicability of
the Iron and Steel Foundry NESHAP to our foundry operations. If applicable,
compliance with the Iron and Steel Foundry NESHAP may result in future
significant capital costs, which we currently expect to be approximately
$5 million in total during the period 2006 through 2007.

Our operations, facilities and properties are subject to extensive and evolving laws and regulations pertaining to air emissions, wastewater discharges, the
handling and disposal of solid and hazardous materials and wastes, the investigation and remediation of contamination, and otherwise relating to health, safety and the protection of the environment
and natural resources. As a result, we are involved from time to time in administrative or legal proceedings relating to environmental, health and safety matters, and have in the past and will
continue to incur capital costs and other expenditures relating to such matters. In addition to environmental laws that regulate our subsidiaries' ongoing operations, our subsidiaries are also subject
to environmental remediation liability. Under the federal Comprehensive Environmental Response, Compensation, and Liability Act, or CERCLA, and analogous state laws, our subsidiaries may be liable as
a result of the release or threatened release of hazardous materials into the environment. Our subsidiaries are currently involved in several matters relating to the investigation and/or remediation
of locations where they have arranged for the disposal of foundry and other wastes. Such matters include situations in which we have been named or are believed to be Potentially Responsible Parties
under CERCLA or state laws in connection with the contamination of these sites.
Additionally, environmental remediation may be required to address soil and groundwater contamination identified at certain facilities.

As
of January 31, 2005, we had a environmental reserve of approximately $2.8 million, related primarily to TTI's foundry operations. This reserve is based on current cost
estimates and does not reduce estimated expenditures to net present value, but does take into account the benefit of a contractual indemnity given to us by a prior owner of our wheel-end
subsidiary. We cannot assure you, however, that the indemnitor will fulfill its obligations, and the failure to do so could result in future costs that may be material. Any cash expenditures required
by us or our subsidiaries to comply with applicable environmental laws and/or to pay for any remediation efforts will not be reduced or

9

otherwise
affected by the existence of the environmental reserve. Our environmental reserve may not be adequate to cover our future costs related to the sites associated with the environmental
reserve, and any additional costs may have a material adverse effect on our business, results of operations or financial condition. The discovery of additional sites, the modification of existing or
the promulgation of new laws or regulations, more vigorous enforcement by regulators, the imposition of joint and several liability under CERCLA or analogous state laws, or other unanticipated events
could also result in such a material adverse effect.

As
part of an initiative regarding compliance in the foundry industry, the EPA conducted an environmental multimedia inspection at Gunite's Rockford, Illinois plant in September and
October 2003. Gunite received an administrative complaint from the EPA in January 2005 regarding alleged violations of certain registration and record maintenance regulations, with a
proposed penalty in the amount of approximately $138,600. Gunite is reviewing the complaint and has not yet responded.

The
final Iron and Steel Foundry National Emission Standard for Hazardous Air Pollutants, or NESHAP, was developed pursuant to Section 112(d) of the Clean Air Act and requires all
major sources of hazardous air pollutants to install controls representative of maximum achievable control technology. We are evaluating the applicability of the Iron and Steel Foundry NESHAP to our
foundry operations. If applicable, compliance with the Iron and Steel Foundry NESHAP may result in future significant capital costs, which we currently expect to be approximately $5 million in
total during the period 2005 through 2007.

Item 2. Properties

The table below sets forth certain information regarding the material owned and leased properties of Accuride and TTI. We believe these properties are suitable
and adequate for our business.